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Last Thursday, at a congressional hearing, Assistant U.S. Fish and Wildlife Service Director Gary Frazer said that the Interior Department’s Office of Science Integrity would conduct an independent evaluation of the work of FWS biologists accused by a federal judge of being dishonest with the court and acting in ’”bad faith.” As the Los Angeles Times reports, Frazer said the FWS stands behind the work of its scientists but the Department will seek an independent assessment from outside experts nonetheless.

Frazer’s comments were delivered at a House Science Committee Subcommittee on Oversight and Investigations hearing on “The Endangered Species Act: Reviewing the Nexus of Science and Policy” at which I was also a witness. In my testimony, I focused on the broader issue of how science is and should be used in under the ESA, and made three basic points.

First, it is important to ferret out genuine instances of scientific misconduct or science politicization. At the same time, it is essential to recognize that science merely informs, and does not dictate, policy. Species conservation is not – and cannot be – a wholly scientific exercise. Whether a given species is at risk of extinction may be a scientific question, but what to do about it is not. The likelihood that habitat loss or the introduction of an invasive species will compromise a species chance of survival in the wild is a question that can be answered by science. On the other hand, what conservation measures should be adopted to address such threats, and at what cost, are policy questions. Science can – indeed, must – inform such inquiries, but science alone does not tell us what to do. Insofar as debates over conservation policy are dressed up as scientific disputes — or instances of science abuse — we hamper our ability to assess competing policy options and pursue optimal conservation strategies.

Second, the structure of the ESA both undermines our ability to base conservation decisions on the best possible scientific information and creates substantial incentives to manipulate science so as to influence policy outcomes. The former occurs because the ESA makes the presence of endangered or threatened species a liability to private landowners. As a consequence, private landowners are often reluctant to allow government or other researchers to conduct surveys or engage in other species-related research on their land. This means the ESA makes it more difficult to know which species are most in need of help and where they are.

The ESA creates incentives for interest groups and others to try and manipulate science because certain science-based determinations, such as whether a species is “endangered,” are triggers for non-discretionary regulatory measures. This means that if an interest group wants to influence regulatory outcomes, it is in their interest to try and influence the initial scientific determination. This explains why there is so much controversy and conflict over species listing decisions. The Act itself turns what should be primarily a scientific inquiry — whether the best available science indicates that a species meets a given definition of what it means to be endangered or threatened — into a high stakes proxy battle over regulatory policy. This is not good for science, and further complicates the quest for optimal conservation measures.

Earlier this month President Obama asked the Environmental Protection Agency to shelve a proposal to tighten the National Ambient Air Quality Standard for ozone this year. The Administration was apparently concerned about the cost a tighter standard would impose, and the EPA is required to consider revising the standard in 2013 anyway. Does this mean metropolitan areas are off the hook for additional environmental controls? Nope. Even without a tighter standard, many metropolitan areas will have to adopt more stringent pollution controls in order to meet the revised ozone standard adopted by the Bush Administration in 2008, as EPA Administrator Lisa Jackson confirmed in House testimony yesterday. The WSJ reports:

Testifying before a House subcommittee, Ms. Jackson said her agency would enforce an ozone standard of 75 parts per billion, adopted by the EPA in 2008. Until now, the standard had been suspended because of the EPA’s intention to introduce a more stringent measure, and the 1997 standard of 84 parts per billion prevailed.

There are 52 areas where air quality fails to meet the 2008 standard, the EPA said in a memo to state officials. Among them are Baltimore, San Diego, Dallas-Fort Worth and parts of Los Angeles. Ms. Jackson said the EPA would enforce the standard in a “common-sense way” to minimize the burden on state and local governments.

In practical terms, this shows how the Obama Administration’s decision not to tighten the ozone standard this year will not have a significant environmental effect in the near– to medium– term. Those areas with the worst ozone pollution do not meet either standard, so such areas would be required to adopt more stringent regulations either way. As for areas that meet the 2008 standard but would fail to meet more stringent requirements, the compliance date for a revised standard would be years off anyway, so if a more stringent standard is adopted in 2013 as many expect, the practical effect will be small.

While the EPA now plans to enforce the 2008 standard, there is some question whether it will be the standard for long. Not only is a scheduled revision only two years away, but legal challenges against the rule by both environmentalist and industry groups are pending in federal court as well. Given the EPA’s poor record of defending Bush-era air quality rules, it’s certainly possible one of these challenges will succeed.

TheNew York Times tries to provide some perspective to the renewed debate over the economic effect of environmental regulation, and the effect of regulation on jobs in particular. The story was prompted by President Obama’s decision to ask Environmental Protection Agency Administrator Lisa Jackson to withdraw a proposed revision of the National Ambient Air Quality Standard for ozone. Business groups and many local government officials cheered the move; environmentalist groups were dismayed.

Part of the problem in evaluating the costs of regulation is that there have been few systematic studies of such costs after regulations are imposed.

“Regulations are put on the books and largely stay there unexamined,” said Michael Greenstone, an economist at the Massachusetts Institute of Technology. “This is part of the reason that these debates about regulations have a Groundhog’s Day quality to them.”

Mr. Greenstone has conducted one of the few studies that actually measure job losses related to environmental rules. In researching the amendments to the Clean Air Act that affected polluting plants from 1972 and 1987, he found that those companies lost almost 600,000 jobs compared with what would have happened without the regulations.

But Mr. Greenstone has also conducted research showing that clean air regulations have reduced infant mortality and increased housing prices, and indeed many economists argue that job losses should not be considered in isolation. They say the costs of regulations are dwarfed by the gains in lengthened lives, reduced hospitalizations and other health benefits, and by economic gains like the improvement to the real estate market.

The NYT story did not provide links to Prof. Greenstone’s research, so I added them above. For those interested in the subject, a third paper by Greenstone looks at the extent to which air quality improvements can be attributed to the federal Clean Air Act. Prof. Greenstone is, among other things, the former chief economist of President Obama’s Council of Economic Advisers.

The story closes with a quote from current Obama Administration “regulatory czar” Cass Sunstein, who’s in leave from the Harvard Law School.

“My view is that the Republican claim that ‘job-killing regulation’ is a redundancy is as ridiculous as the left-wing view that ‘job-killing regulation’ is an oxymoron,” said Cass Sunstein, head of the White House Office of Information and Regulatory Affairs. “Both are silly political claims that have no place in a serious discussion.”

I agree with Professor Sunstein that the debate over whether regulation kills or creates jobs is not very productive. As a general matter, when a firm is forced to spend money complying with environmental regulations, such expenditures are likely to take the place of more productive investments. Some of these expenditures may benefit other firms, such as those which sell products or services that assist with compliance, but are still unlikely to offset the negative effects of the initial diversion. As a consequence, whether or not there are net economic benefits from environmental regulation will usually depend on the magnitude and nature of the other benefits the regulation provides — benefits that may or may not translate into job creation. Even if an environmental regulation generates net economic benefits, this does not necessarily translate into increased employment. But whatever the effect of regulation on jobs, and even assuming the effect could be predicted with any accuracy, this is only one factor to be weighed when considering the desirability of regulation.

UPDATE: Matt Kahn notes that Clean Air Act regulation is not uniform across the nation, and insofar as regulations adopted pursuant to that law have reduced employment in some parts of the country, this has been offset by greater job creation elsewhere. Indeed, this differential effect is one reason why the Clean Air Act was amended to impose greater restrictions on “cleaner” areas, as B. Peter Pashigian documented in a 1985 paper.

Another interesting aspect of Clean Air Act regulation, relevant to President Obama’s recent decision, is that the economic consequences of tightening a NAAQS may be severe, but they are anything but immediate. Once a new NAAQS is finalized, state and local governments have many years to develop plans to come into compliance, so no direct regulatory burden would have been imposed on private firms for many years. Thus whatever the merits of withdrawing the NAAQS revision proposal, and deferring any tightening to 2013, it will not do much for the economy in 2011, except insofar as one believes the prospects of tighter environmental regulations in the future is a significant impediment to investment and job-creation in the present.

No one really expects the strategy to work—not even those who first brought attention to the plight of the spotted owl. As Forest Service biologist Eric Forsman told the New York Times last month, "If you'd asked me in 1975, 'Can we fix this problem?' I'd have said, 'Oh yeah, this problem will go away.'" But he says he's grown "much less confident as the years have gone by."

And for good reason. Despite a 90% cutback in harvesting on federal lands (which constitute 46% of Oregon and Washington combined), the population of spotted owls continues to decline, as do rural communities that once prospered across the Northwest. In some areas, spotted owls are vanishing at a rate of 9% per year, while on average the rate is 3%...

The truth is that no one fully understands why the spotted owl continues to decline. The rise of the barred owl poses an unexpected, but not surprising, complication. If the natural world would just remain static, species preservation and ecological management would be far simpler. But Mother Nature relishes competition, and the barred owl is a fierce competitor. Are we really prepared to send armed federal agents into Northwest forests in search of barred owls?

The U.S. Fish and Wildlife Service has issued its "final" spotted owl recovery plan [PDF], which calls for another 30 years of management and $127 million.

This sort of reaction—activists and big energy companies uniting to applaud anything that suggests a need for increased subsidies to alternative energy—has been famously described as the so-called "bootleggers and Baptists" theory of politics. The phrase comes from the South, where many jurisdictions required stores to close on Sunday, thus preventing the sale of alcohol. The regulation was supported by religious groups for moral reasons and by bootleggers for market reasons. Politicians would adopt the Baptists' pious rhetoric, while quietly taking campaign contributions from the bootleggers.

Bruce Yandle has written extensively on the "bootleggers and Baptists" theory of regulation in a variety of contexts, including this PERC Policy Series on global warming. Lomborg succinctly describes how the theory relates to climate change policy:

The climate-change "Baptists" provide the moral cover that politicians can use to sell regulation, along with scary stories that the media can use to attract readers or viewers. Businesses see opportunities for taxpayer-funded subsidies, and to pass on inevitable cost growth to consumers. Unfortunately, this convergence of interests can push us to focus on ineffective, expensive responses to climate change. Whenever opposite political forces attract, as activists and big business have in the case of global warming, there is a high risk that the public interest will be caught in the middle.

Case in point: the ethanol boondoggle? Lomborg also describes the dire, yet poorly sourced, claims of rising food prices caused by global warming. Such predictions have led to a recent Oxfam report calling for collective political climate action to combat rising food prices. Yet even the rosiest scenario, in which all politicians agree to reduce carbon emissions by 80 percent by 2050, would result in almost immeasureable reductions in temperatures by 2030. Lomborg has a better idea:

If we want to help the world's poor avoid the pain of higher food prices, we should focus on developing better and more nutritional crop varieties, getting more fertilizer to farmers, fighting for freer trade, and, of course, the elimination of biofuel support. Those are the policies that would make a real impact on food prices.

The most significant environmental case of the Supreme Court’s just-concluded term was American Electric Power v. Connecticut. As I explained in an article for PERC Reports, this case arose out of lawsuits filed by several states and environmentalist groups against five large electric power producers, alleging that their emissions of greenhouse gases contributed to the public nuisance of global warming under federal common law.

On June 20, a unanimous Supreme Court held that the plaintiffs’ suits are displaced by the federal Clean Air Act. Somewhat ironically, this holding was a consequence of the plaintiffs’ prior success bringing global warming claims to court. In Massachusetts v. EPA, some of the same states successfully argued that greenhouse gases are pollutants subject to regulation under the Clean Air Act. Yet this conclusion made displacement of the federal common law claims a done deal. As Justice Ruth Bader Ginsburg’s opinion for the Court made clear, the Court has long held that once Congress delegates regulatory authority to a federal agency, federal common law suits on the same subject matter are displaced.

We hold that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants. Massachusetts [v. EPA]made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Act. And we think it equally plain that the Act “speaks directly” to emissions of carbon dioxide from the defendants’ plants.

That the EPA might not regulate as much as plaintiffs would like – and may not regulate enough to mitigate (let alone eliminate) the public nuisance of global warming – is immaterial. In enacting the Clean Air Act, Congress made the scope and stringency of federal greenhouse gas emissions something for the EPA to determine in the first instance, subject to judicial review.

While Justice Ginsburg’s opinion expressly left open the question of whether the Clean Air Act preempts public nuisance claims brought under state law, its displacement discussion explained why courts are particularly ill-suited to addressing climate change claims of this sort.

The appropriate amount of regulation in any particular greenhouse gas-producing sector cannot be prescribed in a vacuum: as with other questions of national or international policy, informed assessment of competing interests is required. Along with the environmental benefit potentially achievable, our Nation’s energy needs and the possibility of economic disruption must weigh in the balance. The Clean Air Act entrusts such complex balancing to EPA in the first instance, in combination with state regulators. . . .

It is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. . . . Judges may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack authority to render precedential decisions binding other judges, even members of the same court.

While the Court’s holding only reached plaintiffs’ federal common law claims, this discussion may give federal courts pause before approving the plaintiffs’ state-law-based claims. Grounding judicial management of climate policy in state common law does not make it any easier. If anything it would be more difficult insofar as different state-law rules could produce different outcomes. Whatever the merits of common law nuisance suits in other pollution contexts, American Electric Power v. Connecticut means federal courts will not be eager to hear such claims when based on global warming.

Cap and trade, a favorite of statists and even many economists who otherwise are not statists, continues to be touted as a great scheme to combat climate change/global warming. Governor Chris Christie has attempted to pull Bruce Springsteen’s home state out of the Regional Greenhouse Gas Initiative (RGGI). That compact of ten Northeastern states uses a cap-and-trade auction for carbon emissions. The good governor appears to comprehend that things such as RGGI contribute to the dreadful rankings New Jersey gets for its tax and regulatory structure.

Christie stated that “RGGI does nothing more than tax electricity, tax our citizens, tax our businesses, with no discernable or measurable impact upon our environment.” As such, RGGI was “a failure.”

When Christie pulled the plug, the RGGI auction was suspended due to a lack of bidders to keep the price above the official price floor. The majority of carbon-spewing permits were unsold.

The New Jersey legislature, ever vigilant against any move to make the state a more attractive place for business, passed a bill to revoke the governor’s revocation. It is presumed he will veto the bill that revokes his revocation of New Jersey’s participation. So the matter is unresolved.

Now, the law firm Smith Valliere and the Competitive Enterprise Institute have filed suit in New York court contesting the authority of the state’s governor (now Andrew Cuomo) to put New York into the RGGI without legislative approval. The scheme has generated over $320 million in revenue for the state in three years. That revenue is supposed to go for “green initiatives,” ha ha.

The suit alleges that a disguised tax has been unconstitutionally imposed on the citizens of New York without approval of the legislature. Shockingly, even in New York, which constantly challenges California to lead the nation in taxes, the governor cannot enact taxes by fiat. Hence, RGGI’s cap-and-trade is “taxation without representation.”

As New York continues to make itself ever-less friendly to live in, let alone run a business in, it remains to be seen if the legislature will hope the courts uphold the tax so it does not have to vote directly on the matter. Better to pontificate about being “green” without attaching a specific price tag to alleged green policies.

According to Eric Schlosser, of Food Inc. fame, "The American people are becoming really, really unhealthy and this is an issue we can't just leave to individuals deciding to bicycle instead of drive their car. We need governments worldwide to be taking action to reverse the problem."

We need government action to “reverse the problem”? Why didn’t we think of that? How shrewd.

Look, I get it. A diet of Big Macs and Cherry Coke isn’t pretty. I would probably agree with Schlosser about what constitutes a healthy diet. I like a meal of fresh, locally procured produce as much as any food activist. In fact, I’ve taken my food consciousness a step further and spend most of my time and energy growing healthy food for conscientious consumers. The happy meals they make of it are a far cry from the drive-thru option, and I’m glad for that.

The difference is that I’m not attempting to foist my views of food morality through regulation. While we may share similar tastes, I draw the line at imposing it on others. I too would like to see schools serving better food and have done my small part to help it happen. I too would like to see locally raised products become more affordable and have been trimming costs to become more accessible.

But before we congratulate ourselves too primly, I’d like to point out that the despicable eating habits of the pathetic “individuals” vilified by Schlosser have already moved far ahead of him…

I first got wind of this fact during a weak moment at Wendy’s. We pulled in, trying to hide our “Grassfed Beef” emblazoned door panels. Not only do they offer a rather remarkable salad (spinach leaves, cranberries, mandarin oranges and bleu cheese), but the crafty buggers even gave the kids educational flash cards and puzzles. As our brood plowed through a package of freshly cut apples, I couldn’t help but wonder what Wendy’s was up to. Nothing good, you can be sure.

Subway is now the world’s most commonplace food joint, outstripping even the megalithic McDonald’s. Burger King is now offering their latest fare on a ciabatta bun. Ciabatta? That’s so chic, even Microsoft Word doesn’t recognize it. How are those cretins on the street to relate?

I have to credit Schlosser and his gang. The work they have done in educating the eating public is wide-ranging and important. So why not leave it there? Why sully it with blatant attempts to push it into the realm of “governments worldwide”? Michael Pollan, a somewhat more muted activist, says it well:

I really have a lot of faith -- and I know that it's considered naive by some people on the left -- that consumers can change things. I have seen too many cases of what happens when consumers decide to inflect their buying decisions with their moral and political values. It brings about change.

Indeed it does. The vibrant social debate over what makes for good food and where to get it is an excellent one to have. But let’s keep the debate (and the choices people make) out in the open, not behind the counter of the state. The unintended consequences of state dabbling are usually too hard to swallow.

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Founded 30 years ago in Bozeman, Montana, PERC—the Property and Environment Research Center—is the nation’s oldest and largest institute dedicated to improving environmental quality through property rights and markets.

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